On Monday, Citi updated its financial model for Playa Hotels & Resorts (NASDAQ: NASDAQ:PLYA), leading to a revised price target and maintaining a positive outlook on the company's stock. The new stock price target has been set at $12.00, up from the previous $11.00, while the firm continues to recommend a Buy rating for the stock.
The adjustment reflects the actual fourth-quarter results from 2023 and revised operating assumptions. These include the effects of the Mexican peso's appreciation against the U.S. dollar and the dilutive impact of an asset held for sale. The new price target is based on an estimated 9.4 times the 2024 expected EBITDA of $257 million.
Citi has also provided forecasts for Playa Hotels & Resorts' earnings per share (EPS) for the first quarter of 2024 and the full year. The first quarter EPS estimate has been adjusted to $0.33, down from the previous estimate of $0.38. Similarly, the forecast for the full-year 2024 EPS has been revised to $0.49 from the earlier estimate of $0.57.
The updated EPS estimates take into account the potential impact of continued share repurchases by the company. Additionally, the estimates are based on slightly more conservative growth rates than previously anticipated. These revisions are part of Citi's regular review process of the companies it covers, ensuring that their models reflect the most current data and market conditions.
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